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Thursday, February 2, 2012

Saving money the John D. Rockefeller way

For anyone that wants to save money, I can’t think of a better way for you to that than to employ this simple technique used by one of the greatest businessmen of all time, John D. Rockefeller. I remember watching a documentary about the Rockefellers quite some time ago, and I picked up the money saving technique from there. That saving technique was simply to write down all of his expenses down to the very last penny. John D. Rockefeller maintained this practice even when he was very rich.

I tried this simple technique and achieved satisfactory results. I would maintain a file on Microsoft Excel where I would write all my daily expenses down such as my meals, transportation, and the occasional packet of M&M’s I would pick up at the convenience store. By doing that, I was always thinking of how a certain purchase would affect my daily budget, and that caused me to cut down on a lot of things I didn’t really need and stay on budget. I would also know when I’ve overspent and would make up for it by spending a little less the next day.

By keeping track of all your expenses in a notebook or spreadsheet, you will be able to look back at your spending data over a period of time (say a month or so) and identify the things that you spend the most money on. With the knowledge of your monthly (or whatever time period) expenses, you will really be able to make the cuts that matter and have a significant impact on your savings results. You might find some really interesting things when you look back over your spending data. For instance, I found out I was spending a bomb on cab fare and decided to wake up earlier and take the bus; this resulted in significant savings that I used to make more investments.

There’s 2 ways to have more money, either make more or save more. It doesn’t take much effort to list down your daily expenses on a spreadsheet, but the impact on your bank account can be huge over the long-term. This technique from John D. Rockefeller has saved me a significant amount of extra money while I applied it to my daily life (I have not been writing down my expenses for quite some time, and unfortunately my savings have dipped).

If you liked this article, you might also like Basic Investing Lessons from John D. Rockefeller. If you have any questions or have anything that you would like to add please comment or send me a private message. Thank you for reading, and may you always sustain good returns on your portfolio. Take care.